U.S. private capital giant Tiger Global Management is making a big bet on one of Canada’s fastest-growing startups, Float Financial Solutions, a Toronto company aiming to change how Canadian small and medium-sized businesses spend their money.
Tiger Global is leading a US$30-million investment into Float Financial just five months after the startup raised US$2.8-million in a seed financing equity deal. It’s at least the sixth Canadian investment this year by Tiger, which is renowned for offering fast-growing tech companies big dollars at rich valuations, and a willingness to close deals rapidly.
“We were impressed by how rapidly the Float team delivered a product that customers love after launching earlier this year and believe the company is well positioned” for years of growth, Tiger Global partner Alex Cook said in a statement.
Float Financial is leading a pack of new entrants trying to bring financial alternatives to Canadian small and medium-sized businesses (SMBs) that say they are underserved by big banks. They are following the lead of more established U.S. upstarts including Brex Inc., Ramp Business Corp. and DivvyPay LLC, which have achieved valuations into the billions of dollars by offering their SMB clients corporate credit and charge cards, backed by software to manage spending.
Other startups betting Canada also has a similar potential include Toronto’s Caary Capital Ltd., and Jeeves Inc. of New York, which launched in Canada last week. Corporate cards are useful for smaller enterprises, but can be hard to get from traditional lenders because of difficulties underwriting credit risk of unproven companies.
Float Financial is off to a fast start. It had five customers in March, processing less than US$10,000 in payments that month. Now, the company says, it has hundreds of customers and processes US$1-million-plus weekly.
The new funding reflects that torrid expansion, valuing the 15-person company at 10 times the level it achieved in June. “The traction we’re having is pretty explosive,” said Rob Khazzam, Float Financial’s chief executive officer. Mr. Khazzam joined the company in March after leading Uber’s expansion in several European markets and Canada. “At Uber I saw really fast growth. But this has blown away my expectations.”
Joining Tiger Global in the round are several big-name Canadian tech founders including past Float Financial backers Michael Hyatt, Michael Katchen and Kirk Simpson; private equity stalwart Brent Belzberg; Russ Jones, former chief financial officer at Shopify Inc.; and Golden Ventures, Garage Capital, Susa Ventures and Tiny Capital.
“It’s one of the fastest growing companies we’ve ever seen,” said Chad Byers, general partner with San Francisco-based Susa, a backer of U.S. online trading startup Robinhood Markets Inc.
Float has “nailed product market fit,” said Mr. Hyatt, one of Float’s first investors. “They have a product that everybody wants and their client acquisition is extremely fast.
A major selling point: The cards Float Financial and its rivals offer do not require personal guarantees from business owners. To sidestep the underwriting risk banks face, Float uses a prepaid model: Clients fund an account upfront and can create, control or destroy any number of physical and virtual cards, including single-use cards for specific purchases. Its software makes it possible to set automatic spending controls and receipt collection, and integrates with accounting programs.
Caary Capital also offers corporate cards and similar software, but with a key difference: It offers credit based on a client’s perceived risk level at interest rates in the low- to mid-teens. Caary, which raised $4.6-million in seed funding last summer, partners with data aggregator Flinks to access clients’ transaction data and combine it with other information sources to make credit decisions. Caary plans to bring on up to 100 new clients over the coming months and fully launch in early 2022. “For us, the strategy is really more building that longer-term credit relationship,” Caary CEO John MacKinlay said.
The model Float Financial and Caary Capital are emulating has worked south of the border: Last week, TechCrunch reported that Brex had signed a deal to raise US$300-million, valuing the four-year-old company at US$12.3-billion. Brex last raised US$425-million in April. Tiger Global was the lead investor.
While many Canadian startups look to global markets to expand, Mr. Khazzam and Mr. MacKinlay believe there is enough of a market at home to grow larger, with hundreds of thousands of potential clients. Their research suggests up to 80 per cent of smaller businesses would like to use corporate credit cards, but only a fraction do.
Dan Park, a former Uber colleague of Mr. Khazzam’s who runs online auto sales startup Clutch Canada Inc., said since his company added Float Financial it has issued cards to three-quarters of its 160-person staff. They collectively run about 100 transactions a day through the system. “We can create a card for each different expense item and have that seamlessly integrate with our expense and reporting systems,” said Mr. Park, who is also a Float Financial investor.
So far, Float Financial and its peers are filling a niche rather than disrupting a segment of traditional lenders. But they plan to expand their offerings to areas such as instalment lending, and Mr. MacKinlay said Caary Capital is open to partnering with big financial institutions.
As competition increases, these companies could also become acquisition targets for U.S. rivals or Canadian banks. “Do we see a takeout, potentially? For sure we’re open to anything,” Mr. MacKinlay said. “Right now we’re focused on building a great business.”
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Peel Hunt Reports Record First-Half Investment Banking Revenue – BNN
(Bloomberg) — Peel Hunt’s investment banking unit reported record results in the six months to Sept. 28 as the exit from lockdown boosted market confidence and the broker grew its client roster.
Revenue at the division rose 43% to 32.7 million pounds ($44 million), with investment banking fees up almost half, the company said in a statement Wednesday. That’s its strongest half-year on record.
“We continue to grow our number of retained investment banking clients and have a healthy deal pipeline with a strong balance of transactions,” Chief Executive Officer Steven Fine said in the statement. “We’re well positioned to execute our growth plans, which include opening an European office.”
The firm’s research operations grew by 3.5% and revenue at its execution and trading operations more than halved to 24 million pounds, reflecting an expected normalization from the heightened trading volumes seen at the onset of the pandemic.
The firm returned to London’s Alternative Investment Market at the end of September, more than two decades after it was first floated. It currently has 162 corporate clients, with an average market value of around 775 million pounds.
©2021 Bloomberg L.P.
Here’s why you shouldn’t shy away from investing, even if you only have a small amount of money – CNBC
Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.
Robert G. Allen, author of several best-selling personal finance books once asked, “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
Using a savings account and an emergency fund for short-term expenses is important, but investing for retirement and the future is arguably just as crucial. While it may feel pointless to start investing if you don’t have much money, it can still be incredibly worthwhile. Think of it this way: few, if any, start investing with a large sum of money. For many, growing your wealth happens over years and years and is a slow and steady process.
By starting slow, even with a small amount of cash, you can begin to establish the habit of investing regularly, which will hopefully lead to a large nest egg in the future.
Select details why you should start investing today, even if you don’t have a large amount of money to start with.
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Why you should start investing today
Investing can be an intimidating word and concept for many reasons. There are a large amount of terms, tax implications, planning and investments to understand — along with knowing there will be market fluctuations making your net worth go up and down. But by understanding the mere basics, you can begin to grow your wealth quickly.
Corbin Blackwell CFP, senior financial planner at wealth management app Betterment, told Select that, “Investing is one of the best ways to grow your long-term wealth and reach major goals for things like retirement, buying a home and college funds.”
He also said that beginning the investing journey is often the most difficult part, as growth will be limited at first. He added that, “Tools available today, like digital investment advisors, make it easier than ever to get started.”
And by getting started today, you have the best asset that any investor can have on their side: time.
By letting your money sit in the market longer, you allow for compound interest to take over — which is when your interest and gains stack on top of one another. Blackwell gives an excellent example of the power of compound interest:
“Let’s say you invested just $100 today and saw a 5% annual return – thanks to the power of compound interest, if you don’t touch your investment, in 30 years you’d have $430.”
That’s an ok return, but imagine if you invested $100 monthly for 30 years into a common index fund. An index fund is a fund that has a group of companies within it, and tracks the performance of the entire group. These groups can range in focus including the size of each company, the respective industries, location of the companies, type of investment and more. One of the most popular indices, the S&P 500, consists of the 500 largest companies in the United States, making it a relatively safe investment because of its exposure to hundreds of companies and dozens of industries.
Many consider this a ‘boring investment,’ but the results the index has produced are nothing to balk at.
The average yearly return of the S&P 500 over the last 30 years is 10.7%, but even at a conservative return of 8%, you would have over $146,000 if you invest $100 a month for 30 years. The impressive part is that your total contributions would be $36,000, which means your money would have quadrupled in value in 30 years (note that past performance does not guarantee future success).
In short, the more money and more time you have in the market, the more likely you are to grow your investment funds.
S&P 500 Index performance during the Covid-19 pandemic
How to begin investing
If growing your net worth is your goal, you can get started in just a few minutes. Here are a few things to consider:
Build a budget that works for you
Starting to invest with a small amount of money isn’t an issue. However, it’s important to know how much you can afford to invest, as you don’t want to harm your personal finances in the process. Blackwell urged, “as long as you aren’t using money [to invest] that you need to cover day to day expenses such as food, rent and high interest debt payments, I recommend you start investing.”
A budget gives you a way to see where your money is going each month, where you can possibly cut back and how much you can invest each month. You can set up a budget for yourself using a budgeting app, a spreadsheet or even a simple pen and paper. I use Personal Capital to manage my budget because I’m able to track my expenses and monitor the performance of my investments in one convenient app.
Regardless of which budgeting method works best for you, it’s important to have an established budget to understand how much you can invest each month without cutting into the money allocated towards your monthly essentials.
Select an investing “bucket” and investments
There are many different buckets you can fill with money, such as a Roth IRA, HSA, 529 or taxable brokerage account. Each of these accounts serve a different purpose and have different tax implications, so be sure to select one that makes sense for you. For example, a Roth IRA is great if you plan on being in a higher tax bracket when you retire — you’ll contribute after-tax income but all gains are tax-free after 59 and a half years old.
Once you select the type of account you want to invest within, you then must decide what type of investment to put your money into. This is the puzzling part for many, as there are an abundance of options, from ETFs to viral meme stocks to index funds and many more in-between.
For long term investors, index funds are a great solution as they have low fees, are low maintenance, provide wide exposure and many provide stable returns. In fact, John Bogle, the founder of Vanguard, summarizes the effectiveness of index funds in one analogy: “Don’t look for the needle in the haystack. Just buy the haystack.”
Regardless of which investment you choose, it’s important to evaluate your risk-tolerance and understand what you’re investing in. Be sure to do your own research, and potentially connect with an accredited financial advisor to discuss the best options.
Automate your investing
Once you determine how much you can and want to invest each month, it’s important to turn on auto-investing.
This is where money is taken out of your checking account each month and automatically deposited into your choice of investments. Choosing this option is important because it takes the leg work away from needing to invest each month. Additionally, studies show that we are built for ‘present bias‘ — which is the idea that the farther away something is, the less important it is. Essentially, it’s much easier to spend now, rather than save for later. Automating transfers from your checking account or paycheck into an investment account will help ensure you don’t spend money that you were planning on investing.
By automating your investments, you will be passively growing your nest egg and getting yourself closer to reaching your financial goals.
You may also want to consider a robo-advisor like Betterment or Wealthfront. Robo-advisors work by gathering information from you on your financial situation and investing goals to suggest investments that fit your needs and risk tolerance. After supplying this information, the robo-advisor will build you a portfolio based on your answers through computer algorithms and advanced software, with little to no work on your end. Plus, it will rebalance your investments over time based on your goals and changes in the market.
Best brokerages to get started
To begin investing, you’ll need to select a brokerage account provider. These brokerages serve as the intermediary between you and the seller of the stock or security you want to purchase.
When deciding on the best brokerage for you, be sure to consider these factors:
- Fees: These can range from minimum deposits, stock trade fees, mutual fund trade fees and more. Be sure to select a no- or low-fee brokerage.
- Ease of use: Each brokerage has a different website and mobile app. While this is much more subjective, it’s advantageous to use a brokerage with a web interface and experience you understand and enjoy.
- Promotions: From time to time, brokerages will offer bonuses to new users. For example, I recently signed up for a Fidelity brokerage account and earned a $100 bonus after depositing $50.
Below are a few of our favorite online brokerages:
Information about Fidelity accounts has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication.
$0 for stocks, ETFs, options and some mutual funds
Stocks, bonds, fractional shares, ETFs, mutual funds, options
$0 commission on stocks, options and ETFs
Includes stocks, bonds, mutual funds, ETFs, options, Forex, and futures
Information about the Vanguard accounts has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication.
Stocks, bonds, ETFs, mutual funds, options, CDs
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Increased scrutiny will make greenwashing tougher – Investment Executive
The global conversation around climate and social issues will make engaging in greenwashing more difficult, says Jacob Hegge, an investment specialist with J.P. Morgan Asset Management.
Hegge said the growing popularity of bonds that focus on environment, social and governance (ESG) excellence is helping to identify bad-faith players who try to appear more conscientious than they are.
He allowed that investing in green initiatives can be confusing, given unclear and sometimes conflicting definitions, but standardization is coming.
“It’s great to see all the activity around ESG, but a consequence of this increased activity means a greater dispersion in terminology,” he said. “As ESG investing continues to grow, we’d expect to see more standardization. But until then, it’s important to understand that navigating the landscape can be difficult.”
Hegge said investors should test the terminology used to define green projects.
“Is the data or testing methodology readily available for investors to use? Is it easy to understand? Are the definitions explained and easily accessible? These are things investors need to be looking out for,” he said. “It comes down to transparency and consistency. And as ESG investing continues to grow globally, we expect this standardization to be more prominent in the market.”
The hot ESG market makes it all the more necessary for investors to know what they’re buying, Hegge said. “We do think it’s important for investors to look under the hood and pay attention to what investment firms are saying when they title a fund as being ESG. They really need to make sure that investment products are staying true to the prospectus.”
Hegge said green and sustainability-linked bonds are being issued at record levels, and issues are likely to increase.
“This year alone, green social sustainability and sustainability-linked bonds are expected to reach a combined issuance of over a trillion [U.S. dollars], which is doubled compared to last year,” he said. “And … some expect that investment in green bonds will actually double and reach US$1 trillion for the first time in a single year by the end of next year.”
Hegge said many companies are at the beginning of their green journeys, and their success in meeting ambitious targets will reflect their commitment level.
“Don’t narrow your opportunity set by being put off by low ESG scores. The important part is whether these scores are improving over time. You can find sustainable bonds even if they don’t have a sustainable label in the market,” he said.
“The global fixed-income market is very large and there are a lot of opportunities out there.”
This article is part of the Soundbites program, sponsored by Canada Life. The article was written without sponsor input.
With Covid vaccination & booster shots, should we worry about omicron? What is known and still unknown – Economic Times
iPhone SE 3 on course for early 2022 release – TrustedReviews
Stocks sink on Powell’s hawkish taper remarks, Omicron alarm – Aljazeera.com
Silver investment demand jumped 12% in 2019
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